A screenshot from an Amazon order destined for the City of Ketchikan, showing the local sales tax charge of 6.5 percent.
In Ketchikan, and throughout Alaska, residents ordering from online retail giant Amazon might see a new charge when they check out: Sales tax.
Until recently, Amazon did not charge sales tax for Alaska-destined orders. But starting this month, the company is collecting that revenue for communities like Ketchikan that have a sales tax.
Ketchikan has a boroughwide sales tax of 2.5 percent. The City of Ketchikan and the City of Saxman each charge an additional 4 percent sales tax.
According to the Ketchikan Gateway Borough’s finance department, the borough was notified in late December that Warehouse Deals, Inc., was merging with Amazon. Warehouse Deals already had been collecting sales tax on some items, and the merger led to Amazon also registering to collect local sales taxes.
At this time, sales tax will be collected on items sold directly by Amazon. Items sold through subsidiaries or third-party retailers will not necessarily have a sales-tax charge, according to a letter from the Alaska Municipal League.
The borough doesn’t expect a first payment of Amazon’s collected sales taxes until the end of April. According to the borough, sales data for individual businesses is confidential, so information about how much sales tax that online company collects from local customers will be limited.
